Across Africa as seen on Bloomberg
1. Nigeria Central Bank Won’t Devalue Naira, Traders’ Union Says
The Central Bank of Nigeria has no plans to devalue the naira, the head of a money changers’ body said after meeting policy makers.
Officials are “not looking at devaluation” as rising oil prices boost reserves, according to the Association of Bureaux De Change Operators of Nigeria. The naira was little changed at 315.34 per dollar on Thursday, while Brent crude traded above $56 per barrel.
“They assure us that people have no reason to think the central bank will devalue the naira because they have more buffers,’’ Aminu Gwadabe, head of the BDC union, said by phone from Lagos. “They are looking at how they can increase liquidity and close the gap between the official and parallel market.’’
2. South African Rand Heads for Best Yearly Start Since 2008: Chart
The rand’s 1.4 percent rally against the dollar on Thursday put the currency on course for its best start to a year since 2008. Analysts are turning bullish on the currency because of improvements in the country’s external balance, economic growth, inflation and productivity. The rand, which is also gaining against the euro and British pound, this week surrendered its position as the world’s most volatile currency to Turkey’s lira.
3. Cash Is King in Mugabe’s Zimbabwe as Dollar Supply Dries Up
Walk into Pedzai Nyika’s furniture factory in Zimbabwe’s capital and he’ll offer a 20 percent discount straight away — provided you pay in cash.
He’s not alone. A shortage of banknotes gripping the southern African nation has become so dire that business are offering huge discounts to cash-paying customers and limiting the amounts they can charge on credit cards or refusing to accept them altogether.
“I am desperate. Business is very slow, so really I need to do anything I can to retain cash flow,” Nyika, 46, said by phone from his office in Harare. Most fabric suppliers “only accept dollar notes, nothing else and certainly not cards.”
4. Army Is Ouattara Achilles’ Heel as Ivory Coast Economy Roars
As Ivory Coast President Alassane Ouattara presides over Africa’s fastest-growing economy and leads a ruling coalition that’s just won a fresh majority in parliament, he still faces a key threat to national stability: the army.
A two-day mutiny by soldiers demanding better pay and living conditions that paralyzed several cities last week was the second uprising in three years. It showed that the world’s biggest cocoa producer is still vulnerable after emerging from a decade-long conflict that ended in 2011 when Ouattara, 75, came to power. Tensions may also rise over the contest to succeed Ouattara in 2020 and the failure to reconcile the two former warring sides.
5. Bondholders Say Mozambique Will Pay as JPMorgan Sees Default
Will Mozambique default or not?
JPMorgan Chase & Co. says the African nation is poised to miss payment on a $60 million coupon next week, but a former International Monetary Fund official who’s advising bondholders insists the government has the money.
“It’s in the interest of Mozambique, as well as the bondholders, for the government to pay the coupon,” Charles Blitzer said in an e-mailed response to questions. “I can’t see any good consequences if it doesn’t. The market has overreacted in spades.”
The country’s $727 million of bonds sank to a record after JPMorgan analysts said the government’s rhetoric implies it’s “highly unlikely” to make the payment on Jan. 18.
Credit: Bloomberg
